US farm policy: Doing too much for too many?

I think what has happened, more so than ever before as we go into the 1985 farm-bill debate, is an elementary recognition of the tremendous interrelationships that exist in the agricultural community.' At a public hearing on agriculture policy last year, one Iowa farmer started his testimony by quoting from a book:

``Cheshire-Puss . . . would you tell me, please, which way I ought to go from here?''

``. . . That depends a good deal on where you want to get to,'' said the Cat.

``I don't much care where,'' said Alice.

``Then it doesn't matter which way you go,'' said the Cat.

This passage from Lewis Carroll's ``Alice in Wonderland'' says much about United States farm policy, observers say. It has no clear direction.

Over the past 50 years, demands have flowed in from all sides: Keep food prices low! Raise farm income! Export! Preserve a rural life style! And farm policy has plowed a zigzag course. In the 1970s, three US presidents tried to use agricultural embargoes as foreign-policy tools.

What are the results after 50 years? Pretty murky, experts say. Some experts claim the policies have worked. Agriculture Secretary John R. Block, who next week is expected to announced new farm-program proposals, calls farm programs an outright failure.

Fifty-two years ago, facing a worse farming crisis than today's, President Franklin D. Roosevelt and Agriculture Secretary Henry Wallace sent American agriculture in a new direction. They drafted the nation's first comprehensive farm legislation -- much of which is still in effect today.

These policies, many experts say, generally have helped stabilize the industry. But it has not kept farms from getting bigger, more capital-intensive, and dwindling in number.

``We've presided over the transfer of labor from agriculture to industry,'' says Thomas N. Urban, president and chairman of Pioneer Hi-Bred International. ``We've done it very nicely.''

In retrospect, this economic stabilization was the primary goal of Roosevelt and Wallace, says Wayne Rasmussen, historian for the US Department of Agriculture (USDA).

But the policy muddle already was beginning, says Lynn M. Daft, vice-president of Abel, Daft & Earley, a Washington-based economic consulting company.

At the time, stabilizing the economy meant boosting the incomes of the predominantly small, family farmers.

``You could confuse two things and get away with it,'' he says. ``You could describe [the legislation] in terms of the preservation of the family farm.''

But that confusion of goals -- stabilizing an economy and raising farmers' incomes -- is rapidly becoming impossible, some experts say. Farming has changed too much. Economically, it has become integrated into the national and international economy. Politically, it is increasingly fractured by the competing demands of agribusiness and narrowly focused commodity groups. It represents a diverse mix of individuals. ``One wonders if agriculture as an entity has any meaning any longer,'' says agricultural economist Harold Breimyer.

Helping the ``average farmer'' is increasingly difficult because he's hard to find. Is he the average vegetable or melon grower, who earned $82,000 in net farm income in 1983? Or the cash grain farmer, who averaged $12,900? Is he one of the large cotton operators, who gross $500,000 or more a year and produce nearly half the crop? Or does he represent the majority of cotton farmers, who farm less than 10 percent of the total acreage and likely earn much of their income away from the farm?

How do you target benefits in such a mixed bag? A recent US Senate Budget Committee study found that in 1982, farmers with 2,500 or more acres represented less than 1 percent of the operators but earned an average $99,862 in direct and indirect benefits; the smallest 30 percent of farmers received an average $1,720.

Can farm programs be targeted to help those in need?

That's very difficult, many experts say.

Some observers believe that income supports for farmers will have to come from outside traditional commodity programs. Already, they add, changes in farming have pushed the sector into realms far beyond traditional farm programs -- into issues as diverse as environment, labor, nutrition, and federal land use.

``You used to spend all your time on education and markets,'' says Oakley Ray, who became president of the American Feed Manufacturers Association in 1972 and moved the headquarters to Washington. Now, 40 percent of staff time is spent on legislation and regulations.

Now, economists say, the sector's financial well-being also is increasingly dependent on monetary, fiscal, trade, and exchange-rate policies.

``I think what has happened, more so than ever before as we go into the 1985 farm-bill debate, is an elementary recognition of the tremendous interrelationships that exist in the agricultural community,'' says G. William Hoagland, Republican deputy staff director of the Senate Budget Committee. ``People are beginning to realize that simple modification to a farm price-support program, while it may be important, is not nearly as important'' as the macroeconomic scene.

``The real improvements to the economic dilemmas of agriculture have to come from outside the sector,'' says Kenneth Farrell, of Resources for the Future. The No. 1 priority, he says: reducing the federal deficit. This, he says, would benefit farmers with variable-rate real estate and short-term operating loans.

It could also reduce the high value of the dollar against foreign currencies, which is currently depressing farm exports.

``The deficit reduction is crucial,'' agrees Bill Ramsey, a Mercer County, Ill., farmer who says he has substantial debts. ``Borrow and spend, borrow and spend, won't work any more for the government than it does for me.''

The four-year legislation now covers 14 price-supported commodities, which represent about one-third of US output, and expires this year.

Congressional sources say Secretary Block will propose to phase out income supports to farmers and reduce commodity price supports and tie them to a certain percentage of multiyear average market prices. Payments to farmers would be capped. The dairy program would be overhauled.

The debate may be so intense that agriculture's ultimate direction may not be decided this year, policymakers and economists say.

But the long-term changes in the sector will eventually force some rethinking. Says Mr. Farrell: ``I suspect that in the context of the 1980s, there are some fundamental choices that are going to have to be made.'' -- 30 --